Etsy and its peers like Shopify have had to kickstart their restrategizing agenda.
Retail merchants selling on several online marketplaces including American e-commerce marketplace Etsy Inc (NASDAQ: ETSY) are reportedly seeing delays in their payments owing to their dependence on distraught Silicon Valley Bank (SVB). As a marketplace that operates round the clock, proceeds of sales from Etsy and other firms including Shopify Inc (NYSE: SHOP) have been delayed significantly.
The aftermath of the impact of the collapse of Silicon Valley Bank is just becoming more glaring and many retail marketplaces have had to ask their merchants to submit other payment information in order to promptly process their payments. According to Etsy, just about 0.5% of the active merchants registered on its platform are affected by the force stop in SVB.
This 0.5% of employees account for a total of 2,700 merchants that are experiencing the difficulty. The company already confirmed that it is taking proactive measures to begin disbursing funds to its impacted merchants.
“We are working to pay these sellers today, and we’ve already started processing payments via another payment partner this morning,” an Etsy spokesperson said.
According to the assurances granted by the joint statement issued by the US Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), all depositors’ funds will be paid out as early as the start of business on Monday. According to Etsy, the payment it is processing has no connection whatsoever to that coming from the government.
The pressures in the American banking sector have been a lot, and merchants appear to be bearing the brunt of it all. According to the Economic Times, Moshe Steinberg, a 3D Printer whose only earning comes from Etsy said he has received payment from the marketplace but has yet to clear it through his bank.
Beyond Etsy, Retail Merchants Re-Strategizes
Staying afloat as a multinational business appears to be simple when things are working optimally, however, as things are not in the banking system, Etsy and its peers like Shopify have had to kickstart their restrategizing agenda.
According to Shopify’s CEO Tobi Lutke, the SVB collapse had relatively little impact on the company.
“We use SVB as one of 12 or so banks spread over mostly Canada and US,” Lutke said, adding “a small portion of our US operational fund flows is tied up in SVB but we are working around it and it should be business as usual.”
In order to minimize how much the books are messed up, Shopify has also stopped processing merchant’s payments billed for SVB. As the firm detailed on its website, new account details must be provided in order to receive payments, and these accounts must not have any affiliation with SVB.
Besides Etsy and Shopify, other key payment processors like Jack Dorsey’s Block Inc (NYSE: SQ) have had to implement similar strategies to avoid strains on operations.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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